Gold moves above $1,800 after Jackson Hole

The Jackson Hole is over — we left it in the rearview mirror. Gold moved higher in an immediate reaction, but bullish joy may be premature.

The 2021 Jackson Hole Economic Symposium “Macroeconomic Policy in an Uneven Economy” is already a thing of the past. It was a stimulating conference with a few interesting presentations. But the key appearance for the financial markets was Powell’s speech. Let’s dig into it!

So, the Fed Chair started his remarks with the observation that even though the pandemic recession was the briefest yet deepest on record, the pace of the recovery has exceeded expectations. That being said, the economic expansion has been uneven, and its continuation is threatened by the Delta variant of the coronavirus, high inflation and the remaining slack in the labor market. However, Powell was generally optimistic about the future, saying that the prospects were good for continued progress toward maximum employment, while the elevated inflation would likely be temporary:

The baseline outlook is for continued progress toward maximum employment, with inflation returning to levels consistent with our goal of inflation averaging 2 percent over time.